So it looks as though we are doomed to fight a couple of fundamental political battles all over again. It is something like the mythical Norse paradise of Valhalla where those who have died bravely in battle spend eternity fighting, dying, and being resurrected over and over to do it all again.
Sort of like the current political struggles over the great issues of free trade and socialism.
For a while, it looked like contemporary thought had prevailed. The British had given socialism a fair trial in the years after World War Two. They nationalized everything from health care to airlines to steel mills. Their economy soon became sclerotic as unions and bureaucracies blocked commerce and fresh thinking. Even the Beatles felt like they were overtaxed.
Then Margaret Thatcher came along and the nation that had given the world Adam Smith and David Ricardo returned to the faith and prospered. But people can take only so much of good thing and now the Brits have voted for something called “Brexit,” which will have their nation leaving the the European Union. The degree of separation is still unclear. But it is not a good moment for free trade and open markets.
Which had been the world wide trend long enough that it began to seem like the natural order of things. People began to forget about things like “tariffs” and import “quotas.” Or to consider them, anyway, as relics from another, far less enlightened time when people didn’t use the ‘f word’ in conversation and still smoked cigarettes.
Today, the President of the United States is a fan of tariffs and robustly imposing them. Trade wars, he says, are a good thing and “easy to win.” One of the opposition party’s candidates for his job, meanwhile, calls himself, without apology, a socialist. He doesn’t plan on nationalizing … oh, Facebook or Boeing. Not right away, in any case. In the short term, he has bigger fish to fry. He proposes to nationalize health care.
All … of … it.
One imagines a national health care apparatus operating with all the efficiency and creativity of the Post Office and prays for good health to be followed by a quick and merciful death.
Bernie Sanders and Donald Trump might be figures from the 1930’s, then, brought into the present day and dragging all the old, discredited arguments along behind them. Trump’s affection for tariffs recalls the good old days of Smoot Hawley when the United States of America ran trade surpluses year after year while experiencing double digit unemployment that touched, in one year, twenty-five percent. This was that blissful time known to history as “The Great Depression.”
Tough on the American working man, to be sure, but at least those foreigners weren’t getting over on us by shipping us a bunch of their cheap goods.
The arguments for and against tariffs have been made over and over. We shall see, soon, whether President Trump’s policies bring manufacturing jobs back to the United States or if they result in a series of escalating tariffs, choking off both imports and exports. So far, the most dramatic effect seems to be the loss of income for American farmers who had become accustomed to shipping soybeans to China. Trade wars may, or may not, be “easy to win,” but it seems certain that the other side will shoot back.
And, then, there is the question of just who makes the strategy and conducts the campaigns in a trade war. It will be the same people who, if Bernie Sanders becomes President and gets his way, determine the price and availability of that knee replacement you need in order to walk without feeling pain.
Trade wars are conducted by the state. It makes the decisions regarding what tariffs will be imposed on which products. And, of course, this means that domestic producers of products that are having a tough time competing with imports will be hiring lobbyists and lawyers whose job will be getting to government to impose tariffs in the name of “fairness.” Which can – and often does – come down to protection for producers of shoddy goods. Tariffs, in this case, are a form of job protection for the incompetent but well-connected.
And, finally, there is the business of the first word in the phrase “free trade.” If you grow soybeans on your own land and harvest them through the sweat of your labor, why should you not be allowed to sell them to whomever has the cash.
Tariffs might be imposed in the name of fairness but if they work to the advantage of anyone, it will be the well-connected.
And, of course, to those in government doing the imposing. They will be the guaranteed winners in a trade war.
Geoffrey Norman is a former editor of Esquire magazine and is a regular contributor to the Wall Street Journal, Weekly Standard and National Review. He has authored more than 15 books and remains active shaping public policy discussions. He lives in Vermont.